Pressure from disappointed investors is forcing hedge funds to roll back their fees and has put the traditional “2 and 20” model on the endangered list. Greg Zuckerman reports on MoneyBeat.

This transcript has been automatically generated and may not be 100% accurate.

... pressure from disappointed investors is forcing hedge funds to roll back their fees ... and the traditional two wins one the model ... is now on the endangered list ... here break it down is WSJ's Gregory Zuckerman ... The beggars and a one story that you had today ... it ... tells what's going on here with the hedge fund industry so industry has been underperforming on not supposed to do as well as the overall market with market goes up because they added to this post the hedge fund are doing less well than you would expect ... aam especially stock and money come focused funds ... so as result scientists are putting pressure and this is not a new thing is really ... happening on the last few years but picking up pace ... aam and the two and twenty which will is a misnomer frankly not many people got two and twenty been updated on ... exactly what two wins twenty new issuance to question the average hedge fund charges a management fee which can be as high as two percent ... and a percentage of all gains in the can be as high as twenty percent or even more ... I'm some firms like Caxton some well known firms ... can charge more than twenty percent on historically charge more than twenty percent of all their fees to investors pay a lot ... need to get into hedge funds in the store it's been like a bug in your restaurant where not Evelyn survives but no one cut prices and other cutting prices and for that is you mention is this year's rally or is that the multi year rally down the stock market and ... this was on schools to perform as well but they're really performed even worse in so ... I mean I guess is the longer the rally goers can we expect more of these cuts that equates it to some extent any knew what he says not just this year since two thousand and nine and an awesome view as well as the stock market with a doing the last swelling you would expect given the fact that they are ... generally longer market on our many funds or shorts ... ALM so fuel on the market yuan from like you're doing it is not showing much value for all the fees they are giving up in this world ... the hedge fund or initial fine you really don't wanna pay that much in fees on with interest rates so low so investors are coming around to that that argument in hedge fund world as well says about two and twenty was a bit of a misnomer and so now you say a few examples in your story what are some of that the new fees now that some investors can expect to pay some of these funds into it and it has a lot of flexibility so you get an early on you get a good chunk of money on site fifteen hundred knowing dollars to get much lower fees even under one percent management fees ... I can get a hurdle in other words they have to be certain return in the hedge fund guys before they get paid musical defended Beazer performance fees for the good of all kinds of negotiating today you leap into a few years ago and interesting and so ... it's also about small medium and large size hedge funds and so who was sort of getting in was being impacted the most by this sort of ship in the industry so the industry's change they use to be the case and that wealthy investors dominated the hedge fund world and now it's big institutions like pension funds ... insurance companies and Cal Maine ... and they ... often go with the biggest funds on they feel safer in their U K fired when he came to fire for hiring identifier for the giving of money to be hedge funds ... ALM so the guys were smaller and medium size are really scrambling for money in as result they're more likely to have to cut back on teaser or allow investors to give them some sort of deal so looking ahead ... is there any way that the industry shifts back to that what was happening in the mid two thousand stores this now so that the new normal that we can expect a mean honestly if the market collapses art is really poorly in or talk on two thousand a fee of some sort of ... aam something similar on hedge funds only do really well most Khona markets theres one who got excited about hedge fund in the first place what they did so well will supermarket after two thousand when the tech collapse ... happened hedge funds that especially well they did pretty well in two thousand AIB cigars like ... a John Paulson Smothers anticipated two thousand and Proms ... they do really well most commonly involve tough markets but if you believe that stocks are relatively inexpensive right now is not not too expensive and the stock and the